Airlines Pack Away $3.4 Billion in Bag Fees

NEW YORK (MainStreet) - The Bureau of Transportation Statistics released new numbers Monday showing just how much money airlines made from baggage fees last year, and consumers will not be pleased.

Delta (Stock Quote: DAL) topped the list, bringing in more than $952 million on baggage fees in 2010. That number has more than quintupled since 2008, when the airline made only about $177 million on baggage fees.

Delta isn't the only airline reaping the rewards of baggage fees, however. The industry as a whole has seen baggage fee revenues increase from $464 million to almost $3.4 billion in the past four years. That's a 632% increase in baggage fee revenues for the entire industry.

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American (Stock Quote: AMR) and U.S. Airways (Stock Quote: LCC) came in a distant second and third, respectively, on the list, with each airline taking in more than $500 million in baggage fees.

This isn't the first time Delta has been in hot water for baggage fees. Just last week, the airline changed a baggage fee policy after it charged a group of American soldiers returning from Afghanistan $2,800 for extra bags. The airline quickly apologized and expanded the number of free bags military personnel can carry to five per passenger, but the damage was already done.

Currently, Delta charges $25 for the first bag, $35 for the second bag, $125 for the third bag and $200 for each additional bag for domestic travel.

Why the huge increase in bag fees? One word: taxes. The revenues that airlines make off of baggage fees aren’t taxed by the government, making it easier for airlines to their lower fares in order to attract more customers, while adding baggage fees to increase profits.

Here are the other airlines that pulled in the biggest baggage fees in 2010:

  1. Delta                     $952,250,000
  2. American             $580,663,000
  3. US Airways         $513,623,000
  4. Continental        $341,585,000
  5. United                  $313,207,000
  6. AirTran                 $152,148,000
  7. Alaska                   $108,997,000
  8. Spirit                      $81,503,000
  9. Frontier                $62,115,000
  10. JetBlue                  $57,019,000
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